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Why Academic Quality in Higher Education Declines

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  • Volker Meier
  • Ioana Cosmina Schiopu

Abstract

We investigate the choice of quality, or academic content, in higher education in a two-sector model. Individuals are differentiated according to their cost of acquiring human capital. A higher academic quality increases productivity upon training, but is also associated with higher cost of acquiring skill. We consider both a differentiated university system in which quality is tailored to the individual need, and a uniform quality system being politically determined. The former yields a higher income dispersion. Average quality decreases under both systems when the skill premium increases. Moving from a single stage to a two-stage scheme reduces quality in the first stage and increases quality in the second stage. Increasing differentiation in higher education can decrease student effort and skill of medium ability types.

Suggested Citation

  • Volker Meier & Ioana Cosmina Schiopu, 2015. "Why Academic Quality in Higher Education Declines," CESifo Working Paper Series 5480, CESifo.
    • Handle: RePEc:ces:ceswps:_5480
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    References listed on IDEAS

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    More about this item

    Keywords

    higher education; enrollment; quality; higher education systems;
    All these keywords.

    JEL classification:

    • I21 - Health, Education, and Welfare - - Education - - - Analysis of Education
    • I23 - Health, Education, and Welfare - - Education - - - Higher Education; Research Institutions
    • I28 - Health, Education, and Welfare - - Education - - - Government Policy
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity

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